US JOLTS Job Openings, Factory Orders, BOJ Governor Ueda Speaks

The euro rose against the US dollar on Monday ending the session 0.88% higher, reaching a six-week high of 1.14543.

Heightened trade tensions between the United States and both China and the Eurozone have contributed to the greenback’s decline.

Recent US economic data has added further pressure on the dollar. According to the Institute for Supply Management (ISM), the manufacturing sector remained in contraction during May, with the ISM Manufacturing PMI slipping to 48.5 from 48.7—the lowest since November. The Employment Index remained in negative territory at 46.8, while the Prices Index remained elevated at 69.4, signaling persistent input cost pressures.

On the geopolitical front, US President Donald Trump accused China of breaching trade agreements with Switzerland and announced plans to impose 50% tariffs on aluminum and steel imports effective June 4. The move triggered a broad flight to safe-haven assets—excluding the US dollar. In response, Beijing dismissed the allegations as “groundless” and threatened “forceful measures.”

Meanwhile, EU trade developments remain in focus, with European Trade Commissioner Maroš Šefčovič scheduled to meet US Trade Representative Katherine Tai in Paris on Wednesday, according to an EU spokesperson.

In Europe, the HCOB Manufacturing PMI data for May presented a mixed picture. While most readings signaled ongoing contraction, Spain stood out as the only country showing signs of expansion.

On the monetary policy front, Federal Reserve Governor Christopher Waller signaled a dovish shift, suggesting that interest rate cuts remain a possibility later this year. However, he reiterated that curbing inflation remains the Fed’s primary focus.

Gold prices soared on Monday, climbing to their highest level in over four weeks as escalating geopolitical risks and renewed trade tensions fueled demand for safe-haven assets.

The rally was driven by heightened concerns over the ongoing Russia-Ukraine conflict, after reports emerged that Ukraine carried out an aerial strike destroying Russian long-range bombers and other military aircraft. The development intensified global risk aversion, prompting investors to flock to gold as a hedge.

Adding to the volatile backdrop, US President Donald Trump announced a sharp increase in tariffs on steel and aluminum imports, raising them to 50% effective June 4.

Further uncertainty surrounds the potential for high-level US-China talks, with CNBC reporting that President Trump and Chinese President Xi Jinping could speak later this week—though not on Monday. Markets remain sensitive to any signs of progress or deterioration in relations between the world’s two largest economies.

Gold also found support from a slightly more dovish tone from Federal Reserve Governor Christopher Waller, who stated that interest rate cuts remain a possibility later this year. However, he emphasized that the Fed’s primary objective continues to be controlling inflation.

With geopolitical risks flaring and markets closely watching central bank policy signals, gold remains a favored asset among investors seeking stability amid global uncertainty.

Oil prices surged on Monday as supply concerns took center stage following restrained output plans from OPEC+ and ongoing wildfires in Canada's oil-producing region.

The gains were driven in part by escalating wildfires in Alberta, Canada, which have disrupted about 7% of the country’s total crude output, according to Reuters estimates. Over the weekend, at least two thermal oil sands facilities near Fort McMurray were evacuated, with production temporarily halted as a precautionary measure.

Further supporting crude prices was a broad-based decline in the U.S. dollar, pressured by renewed concerns over potential economic fallout from U.S. President Donald Trump’s latest tariff threats. A weaker dollar tends to make dollar-denominated commodities like oil more attractive to foreign buyers.

Heightened geopolitical tensions also contributed to the bullish tone. Ukrainian drone strikes on Russian targets over the weekend raised the perceived risk premium in global energy markets, according to Jorge Leon of Rystad Energy.

Meanwhile, negotiations between the U.S. and Iran over the latter’s nuclear program offered mixed signals. An Iranian diplomat said Tehran was prepared to reject Washington’s proposal, despite modest progress reported after a fifth round of talks in Rome last month. The uncertainty surrounding a potential agreement kept traders on edge, with implications for future Iranian oil supply.

With tightening supply dynamics and persistent geopolitical risks, oil markets appear poised for continued volatility in the weeks ahead.

U.S. equities reversed earlier losses on Monday, with the US 500 advancing as investors shrugged off intensifying trade tensions between the U.S. and China that have reignited fears of a broader global trade conflict.

The rebound followed a robust May for U.S. equities, during which the US 500 posted a more than 6% monthly gain—its strongest performance since November 2023.

Tensions between Washington and Beijing intensified as China rejected U.S. President Donald Trump’s allegations that it had violated a trade agreement reached in Geneva last month.

The dispute follows comments by U.S. Treasury Secretary Scott Bessent, who acknowledged that negotiations with Beijing had stalled.

Adding to the uncertainty, President Trump announced on Friday a doubling of tariffs on steel imports—from 25% to 50%—effective June 4.

Chicago Fed President Austan Goolsbee reiterated expectations for interest rate cuts once the uncertainty from tariffs subsides. Fed Governor Christopher Waller, speaking in South Korea, echoed this sentiment, saying inflation arising from tariffs is unlikely to persist and could allow for policy easing later in the year—so long as inflation trends toward the Fed’s 2% target and labor market conditions remain stable.

Energy stocks climbed, bolstered by a sharp rally in oil prices after OPEC+ reaffirmed plans to raise production by 411,000 barrels per day in July.